United orders 110 new planes from Boeing, Airbus

United Airlines announced Tuesday it had ordered a total of 110 new planes from Boeing and Airbus, and secured options to purchase 90 more, in a major deal signaling confidence in the aviation sector.

The US airline said in a statement it had ordered 50 Boeing 787-9 and 60 Airbus A321neo aircraft, with deliveries due to begin in 2028.

The combined orders are worth $22.4 billion, according to the two firms' most recent publicly available catalog prices.

"I'm convinced our strategy is the right one as we continue to add new, larger aircraft to take full advantage of our growing flying opportunities both internationally and domestically," United's chief executive, Scott Kirby, said in a statement.

United said it now expects to take delivery of around 800 new narrowbody and widebody aircraft in total between 2023 and 2032.

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Upgrading older fleet

The airplane order is consistent with United's "long-term growth plans," Christopher Raite, an analyst at Third Bridge, wrote in a note.

He added that United's average fleet age was 16.4 years old, higher than Delta and American airlines, and that Tuesday's announcement was more about "catching up than leading the way with a newer fleet."

The firm said it had converted previous options and purchase rights into "firm orders" for the 50 787-9 planes from Boeing, for delivery between 2028 and 2031.

It did the same with the 60 A321neo aircraft from Airbus, for delivery between 2028 and 2030.

United also announced it had secured new options for 50 more Boeing 787s and purchase rights for an additional 40 A321neos from Airbus "at the end of the decade."

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Looming capacity constraints

"United's profit margins now are at the top of the industry," United's Chief Commercial Officer Andrew Nocella told reporters during a press call on Tuesday.

"United has emerged from the pandemic stronger than ever and is the largest carrier in the world by capacity," he added.

Looking ahead, Nocella said United expects to increase the number of people boarding each plane in 2027 by more than 40 seats compared with 2019, citing looming capacity constraints at key airports.

"The country is just not building a lot more runways, and that's just going to cause us to need to upgauge our aircraft respond to growing demand," he said, referring to the planned increase in capacity.

"In the future, United will increasingly turn to global growth to expand," he added.

Source: AFP